Restoring Millions of PHL Jobs Should Also be a Priority
The pandemic can be likened to a powerful typhoon or a calamity that left a trail of destruction in its wake. Like a natural disaster, Covid-19 rendered millions of Filipinos jobless, halted the transportation system and shuttered many business establishments.
Restoring jobs to millions of Filipinos, along with the widespread distribution of vaccines, should be the country’s priority in the coming year. We can only fully reopen and revive the economy if millions of Filipinos are able to reclaim their jobs.
Workers are the lifeblood of the economy. They keep factories moving, run small businesses and retail outlets, and fuel the economy through their purchasing power.
The pandemic has robbed many Filipinos of their jobs, worsening the poverty problem in the process, and kept many people, and students as well, away from hubs of activity like shopping malls, cinemas university belts, and amusement parks. These centers of activities are the microcosm of the economy. They generate jobs, feed the family of market players, and keep the economic cycle spinning.
The World Bank last week noted that some 2.7 million Filipinos would join the ranks of the poor this year due to the Covid-19 pandemic, the job losses arising from quarantine rules to contain the disease, and the recent series of devastating typhoons.
World Bank senior economist Rong Qian sees the Philippine economy contracting 8.1 percent for the entire year, after shrinking 10 percent in the first three quarters. The contraction of the economy simply means more will become unemployed and that it will slow down the pace of government’s poverty reduction programs.
She noted that the quarantine and lockdown measures disrupted economic activity and resulted in income loss, the decline in wage incomes, a slowdown in entrepreneurial activities and a drop in remittances.
“The poor and vulnerable are especially likely to experience significant welfare losses given their limited capacity to manage risks,” she said. “The expected growth contraction in 2020 is likely to increase poverty in the short-term, resulting in 2.7 million additional poor people in 2020 compared to 2019 estimates, measured against the lower-middle-income poverty line of $3.2 a day.”
As I have been writing in this column before, we should reopen the economy further given the discipline and health protocols being seriously observed by our population. Generating and restoring jobs will keep the government on track in reducing poverty incidence in the Philippines.
The National Economic and Development Authority has already conceded that the government’s initial target of reducing poverty incidence to 14 percent by 2021 from 16.7 percent in 2018 is no longer realistic due to the Covid-19 pandemic.
I fully agree with Economic Planning Acting Secretary Karl Chua. The key to economic recovery and reducing poverty is to open the economy more in order to recover the lost income of the displaced.
The latest labor report reminds us of what an economic reopening can do in terms of employment. The unemployment rate in the country improved to 8.7 percent in October from 10 percent in July and 17.6 percent in April after the Philippines allowed more economic activities to resume.
Neda has admitted that the unemployment rate could have been reduced if the economy were opened further and sufficient public transportation allowed. But the latest unemployment rate as of October is still not encouraging—the number of unemployed is higher by 2 million compared with the figure in the same period a year ago.
About 3.8 million Filipinos were unemployed as of October, down from 4.57 million in July and 7.23 million in April. The figure, though, is still higher than the 2 million jobless individuals in October last year when the unemployment rate settled at 4.6 percent.
I still believe, however, the contraction in the economy and the job losses along the way are not long-term problems. Our solid macro-economic fundamentals—a manageable inflation rate, stable currency, high foreign exchange reserves and skilled labor force, and a young population—and a stable political climate will enable the nation to overcome the pandemic and achieve economic recovery soon.
But we must ease the containment measures quickly and allow provinces and local government units to open their borders more to encourage domestic tourism.
We have to reopen further the economy as we increase the distribution of the vaccine—with the generation of millions of jobs as our main guiding principle.